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Swanson v. Traer, 354 U.S. 114 (1957)
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General SummaryThis case is from a collection containing the full text of over 16,000 Supreme Court cases from 1793 to the present. The body of Supreme Court decisions are, effectively, the final interpretation of the Constitution. Only an amendment to the Constitution can permanently overturn an interpretation and this has happened only four times in American history.
Swanson v. Traer, 354 U.S. 114 (1957)
Swanson v. Traer No. 149 Argued March 27, 1957 Decided June 10, 1957 354 U.S. 114
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
Syllabus
This is a stockholders’ derivative suit brought in a Federal District Court in Illinois on grounds of diversity of citizenship by citizens of Nevada against an Illinois corporation, certain individual citizens of Illinois, a Delaware corporation and an Indiana corporation. The complaint alleged a conspiracy to defraud the Illinois corporation through sales to it of certain properties in which some of the directors were personally interested. It also averred a demand on the directors to bring suit, their refusal to do so, and the futility of making any demand on the stockholders. The Court of Appeals concluded that there was no such hostility to the plaintiffs as to make the Illinois corporation "antagonistic" to its stockholders, and it realigned that corporation as a party plaintiff and affirmed dismissal of the suit on the ground that there was no diversity jurisdiction.
Held: the judgment is reversed, and the cause remanded. Pp. 115-117.
(a) The management is definitely and distinctly opposed to the institution of this litigation; it is therefore "antagonistic" to the stockholders, and the corporation was properly made a defendant. Smith v. Sperling, ante, p. 91. P. 116.
(b) Whether the stockholders may sue on behalf of their corporation is a question of local law on which the Court of Appeals did not rule, and the case is remanded to it for consideration of that question. Pp. 116-117.
230 F.2d 228 reversed and remanded.
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Chicago: U.S. Supreme Court, "Syllabus," Swanson v. Traer, 354 U.S. 114 (1957) in 354 U.S. 114 354 U.S. 115. Original Sources, accessed November 25, 2024, http://originalsources.com/Document.aspx?DocID=AB7ZA7WABY2WVEA.
MLA: U.S. Supreme Court. "Syllabus." Swanson v. Traer, 354 U.S. 114 (1957), in 354 U.S. 114, page 354 U.S. 115. Original Sources. 25 Nov. 2024. http://originalsources.com/Document.aspx?DocID=AB7ZA7WABY2WVEA.
Harvard: U.S. Supreme Court, 'Syllabus' in Swanson v. Traer, 354 U.S. 114 (1957). cited in 1957, 354 U.S. 114, pp.354 U.S. 115. Original Sources, retrieved 25 November 2024, from http://originalsources.com/Document.aspx?DocID=AB7ZA7WABY2WVEA.
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